Electronic real-time transaction processing is common in many industries, including retail sales, inventory control, and healthcare. Businesses utilize devices such as card readers, including those reading magnetically encoded cards, to increase productivity and accuracy of various types of transactions. A common application is the use of credit cards for purchasing goods and services in retail sales. Many retailers have deployed automated card readers to facilitate credit and debit card authorization processing by store personnel. Not only do automated card readers provide greater accuracy than manually keying information at time of purchase, they offer greater speed, convenience, and accuracy. Today, it is common for each point-of-sale (POS) terminal to have an integrated card reader or have the terminal connected to a nearby card reader.
Typically, a card reader communicates with a host financial transaction processor using a dedicated phone line. The card reader incorporates a standard modem implemented by a single, low-cost integrated circuit based on modem standards such as V.22, V.22 bis, or V.34. The card reader dials a programmed telephone number (usually local or toll-free) and establishes a telephone connection via a network with the host processor. The card reader transmits the transaction information including the card number, a transaction number, and purchase amount to a host. The host processor accepts or declines the transaction and responds by returning an authorization number. This type of transaction typically occurs quickly as it is desirable to minimize delay and increase customer satisfaction.
Many businesses have a single point-of-sale terminal, and thus require a phone line for handling card authorizations. This is usually in addition to a voice telephone line, used by the business, since the phone line is usually dedicated for the card reader. If the telephone line is shared with a telephone for voice communication, then operation becomes inconvenient, often resulting in delaying card authorizations or voice calls. For businesses having multiple POS terminals, a plurality of telephone lines are dedicated to the card readers, often on a shared basis. While sharing telephone lines among card readers allows some cost savings, this still may result in delays for a given card reader, depending on the current card authorization volume and the number of telephone lines. For a growing business with an increasing volume of card transactions or increase in the number of card readers, constantly monitoring and determining when to add new phone lines is difficult and distracting to the core business functions of the retailer. However, use of dedicated phone lines typically does provide a high degree of reliability and security.
Many businesses now have Internet access to supplement various business functions. Internet access is often provided to various workers at personal computers using an internal local area network (LAN) providing gateway access to an Internet Service Provider (ISP). The physical communication facility between the LAN and the ISP may be of various types, including digital private line, optical fiber, ISDN, DSL, cable modem, wireless, satellite, etc. Typically, digital access arrangements provide higher data communication speeds compared to dial-up connections. Using a LAN to access the Internet allows multiple users to access the Internet at the same time. While simultaneous usage may slow down response times, one user does not ‘block’ access by another, as is the case when a single telephone line is shared by multiple users or devices. Further, the cost of accessing the Internet does not necessarily require additional fees for each simultaneous user accessing the Internet. In contrast, simultaneous access via telephone lines requires a plurality of telephone lines, each of which has a discrete incremental cost.
If retailers could configure their card readers to utilize the Internet for accessing the host processor, the telephone lines dedicated for the card readers would not be required, thus reducing costs for the retailers. However, the use of separate telephone lines does provide the advantage of a reliable and redundant communication architecture. Replacing all the telephone lines with a single Internet access arrangement provides a single point of communication failure rendering all the card readers in the retailer's location non-functional if Internet access is unavailable. The potential for lost profits, even for a relatively short outage, can more than justify the higher cost of using separate telephone lines. Consequently, it would be desirable to have the advantages of Internet access while retaining the reliability and security of a dial-up connection.
U.S. Pat. No. 5,526,409 discloses the use of a second telephone line that can be used as a secondary means of communication in the event the primary telephone line or modem is inoperable. However, using a single telephone line as the primary communication facility limits the data communication speed for transmitting data and limits the destination to a single host. Nor does the patent disclose automatically switching to the second telephone line or automatically switching back to the primary telephone line.
U.S. Pat. No. 5,778,173 discloses using the Internet by a personal computer to facilitate a financial transaction, such as a purchase. However, the complete transaction is not carried out using the Internet; a portion of the transaction conveying sensitive information is sent using a modem on a dial-up telephone connection. This arrangement still requires a dedicated phone line for each terminal and increases cost.
Therefore, what is needed is a system for using existing card reader terminals for accessing a host financial processor using an inexpensive, reliable, and secure transaction processing network while providing backup communication to ensure reliable and secure transaction processing.